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INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 1A - Circumstances in which a taxpayer can qualify for a franking credit, a franking rebate or the intercorporate dividend rebate  

Subdivision A - Preliminary  

SECTION 160APHI  CERTAIN DISPOSALS OF SHARES OR INTERESTS ARE TO BE TAKEN TO BE DISPOSALS OF RELATED SHARES OR INTERESTS  

160APHI(1)  Effect of section.  


The effect of this section is that, in the calculation of the period for which a taxpayer is taken to have held shares or an interest in shares (the primary securities ) during a qualification period in relation to the taxpayer in relation to the primary securities:


(a) a disposal of the primary securities is taken in certain circumstances to be a disposal of certain other securities and not to be a disposal of the primary securities; and


(b) a disposal of certain other securities is taken in certain circumstances to be a disposal of the primary securities and not to be a disposal of the other securities.

160APHI(2)  Meaning of related securities .  


In this section:

related securities means:


(a) the primary securities; and


(b) any shares, or interests in shares, held by connected persons:


(i) that are substantially identical securities in relation to the primary securities; and

(ii) in respect of which a connected person has been paid, or is entitled to be paid, a franked dividend or a franked distribution or, in the case of a connected person that is a company, a rebateable dividend or a rebateable distribution, being in either case a dividend or distribution corresponding to the dividend or distribution paid on the primary securities;

but does not include shares or interests in shares:


(c) in relation to which an election is in force under section 160APHR ; and


(d) which were not acquired or disposed of for the purpose, or for purposes that included the purpose (whether or not the predominant purpose), of avoiding the application of this section.

160APHI(3)  Meaning of connected persons .  


The following persons are connected persons for the purposes of this section:


(a) the taxpayer;


(b) if, at a time during the qualification period, an associate of the taxpayer, under an arrangement to which they were parties, disposed of shares or an interest in shares - the associate;


(c) if the taxpayer is a company - another company that is in the same wholly-owned group.

160APHI(4)  Related securities to be taken to be disposed of on a last-in first-out basis.  


All related securities held by connected persons at a particular time constitute a group of securities for the purposes of this section and, subject to subsections (5), (6) and (7), any disposals of securities in the group that were effected by any connected persons during the qualification period are to be taken, in the order in which they occurred, as having been disposals on a last-in first-out basis, that is to say, as having been:


(a) first, disposals of the latest securities in the group to be acquired by any of the connected persons; and


(b) secondly, disposals of the next latest securities in the group to be so acquired, and so on.

160APHI(5)  Subsection (4) not to apply to disposal between companies in the same wholly-owned group.  


Subsection (4) does not apply in respect of the disposal of securities by a company in a wholly-owned group to another company in the same wholly-owned group.

160APHI(6)  Time of acquisition of related securities held by company that is a member of wholly-owned group.  


If subsection 160APHH(10) applies to a company that is a member of a wholly-owned group in respect of any related securities in relation to a period, the securities are taken, for the purposes of subsection (4), to have been acquired at the beginning of the period.

160APHI(7)  Subsection (4) not to apply if primary securities not held for requisite continuous period.  


If primary securities are disposed of during a qualification period and:


(a) if section 160APHO applies to the taxpayer in respect of the securities - the taxpayer has not satisfied subsection 160APHO(2) in relation to the qualification period; or


(b) if the primary securities are an interest in shares and section 160APHP applies to the taxpayer in respect of the interest - the taxpayer has not held the interest for the continuous period referred to in subsection 160APHP(1) ;

subsection (4) does not apply in respect of the disposal.

160APHI(8)  Where value of securities actually disposed of is less than value of securities taken to be disposed of.  


If the value of any securities actually disposed of is less than the value of the securities that are taken to be disposed of, only such of the last-mentioned securities are taken to be disposed of as have a value equal to the value of the securities actually disposed of.

160APHI(9)  Where value of securities actually disposed of exceeds value of securities taken to be disposed of.  


If the value of any securities actually disposed of exceeds the value of the securities that are taken to have been disposed of, such other related securities as have a value equal to the excess are taken to be disposed of in accordance with subsection (4).

160APHI(10)  Where a disposal is taken to be a disposal of 2 or more parcels of securities.  


If, as a result of the application of subsection (4), a disposal of securities is taken to be a disposal of 2 or more parcels of related securities because those parcels of securities were acquired at the same time:


(a) the connected persons may agree as to the parcel of related securities that is to be taken to be disposed of; or


(b) if they are unable to agree, the Commissioner may determine the parcel of related securities that is taken to be disposed of.

160APHI(11)  Where 2 or more disposals are taken to be disposals of the same securities.  


If, as a result of the application of subsection (4), the disposals of 2 or more parcels of related securities would be taken to constitute a disposal of the same securities because those 2 parcels of related securities were disposed of at the same time:


(a) the connected persons may agree as to the related securities that are to be taken to be respectively disposed of by the disposals of the parcels of related securities; or


(b) if they are unable to agree, the Commissioner may determine the related securities that are to be taken to be respectively disposed of by the disposals of the parcels of related securities.

160APHI(12)  Notional re-acquisition of securities that are taken to constitute a disposal of other securities.  


If, as a result of this section, the primary securities are taken to have been disposed of by the taxpayer but are actually still held by the taxpayer, they are taken to have been re-acquired by the taxpayer immediately after the time when they are taken to be disposed of.

160APHI(13)  Effect of agreement or determination.  


An agreement or determination made under subsection (10) or (11) has effect according to its terms.


 



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